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Irene Jay Liu

A new international housing survey confirms what every Hongkonger already knows - Hong Kong homes are 'severely unaffordable'. 
The city's housing was found to be the least affordable in the survey, beating London, New York, San Francisco, and other high-priced locales. 
The median home in Hong Kong costs 11.4 times gross annual median household income, according to a report by the US-based consulting company Demographia, which examined housing affordability in six countries and Hong Kong for the third quarter of 2010. 
This is the first time Hong Kong has been included in the survey, which compares major metropolitan areas in Australia, Canada, Hong Kong, Ireland, New Zealand, the UK and the US. 
The report noted that only one city, Los Angeles, has equalled or exceeded Hong Kong's 'median multiple' (the median house price divided by gross annual median household income) in the seven-year history of the survey. 
 Markets where home prices are 5.1 times household income or more are considered 'severely unaffordable' by the report.  
 Home prices in Hong Kong have surged more than 50 per cent in the past two years, powered by interest rates at a two-decade low, an expanding economy and an influx of buyers from the mainland.
 'High housing costs can be justified if productivity and average household incomes  both rise at a compatible pace,' said Professor Raymond So of the Hang Seng Management College.  'But they are creating many social problems in Hong Kong where economic expansion is only benefiting the high-income and professional groups.'
Australian homes are the  least affordable among English-speaking nations, but far behind Hong Kong, with a median multiple of 6.1. US homes were most affordable at three times median earnings. 
All the affordable major markets - with homes that cost three times annual income or less - were in the US, with Atlanta, Georgia, the most affordable larger city where the median house price is US$129,000.
The number of US homes involved in a mortgage  foreclosure filing will climb about 20 per cent in 2011, RealtyTrac Inc said in a  recent report, pushing home prices down further. A record 2.87 million properties got notices of default, auction or repossession in 2010, according to the report.
Sydney was the second  least affordable city,  with a median multiple of 9.6, followed by Vancouver (9.5), Melbourne (9), Plymouth and Devon in the UK (7.5), San Francisco-Oakland (7.2) and London (7.2). 
Hong Kong's rising property prices have become one of the city's leading economic and political concerns, with a growing number of the city's middle-class residents saying they can no longer afford the city's runaway housing prices.
In November, the government tried to cool the market by raising stamp duty on homes resold within two years, and as high as 15 per cent if the property was resold within six months. The measures worked briefly but the prices soon rebounded. Sales in the secondary market rose 27 per cent last year. 
Sky high
'Affordable' homes are said to cost three times annual income or less 
Hong Kong's 'median multiple', or median house price divided by gross median household income, is: 11.4



HK way ahead of rivals for severely overpriced homes